Receiving a lowball offer on your home can feel like a slap in the face, especially after you've invested time, money, and emotional energy into preparing your property for sale. While that initial sting is completely natural, how you handle these offers can make the difference between a successful sale and a missed opportunity.
What Exactly Is a Lowball Offer?
In real estate terms, a lowball offer is typically defined as any purchase offer that comes in 20-25% or more below your asking price. In today's competitive market with limited inventory, even offers 15-20% below asking price might be considered lowball offers.
For example, if your home is listed at $300,000, an offer of $225,000 or less would generally be considered a lowball offer. However, the definition can vary depending on your local market conditions and how long your home has been on the market.
Why Buyers Make Lowball Offers
Understanding the motivation behind lowball offers can help you respond more strategically. Here are the most common reasons buyers submit low offers:
- Market research: They believe your home is overpriced based on comparable sales
- Testing the waters: They want to gauge how motivated you are to sell
- Financial limitations: The low offer represents their maximum budget
- Property concerns: They've identified issues that affect the home's value
- Negotiation strategy: They're starting low with plans to negotiate upward
How to Handle Lowball Offers Like a Pro
Keep Your Emotions in Check
Your first instinct might be to feel insulted or frustrated, and that's completely understandable. You've likely invested significant money in staging, repairs, and marketing your home. However, emotional reactions rarely lead to successful negotiations.
Take a deep breath and remember that this is a business transaction. The buyer isn't necessarily trying to insult you—they're simply trying to get the best deal possible, just as you're trying to maximize your sale price.
Don't Reject Immediately
Even the lowest offers can sometimes evolve into acceptable deals through negotiation. Before dismissing an offer outright, consider whether there's room for productive dialogue.
A polite response that leaves the door open might sound like: "Thank you for your interest in our home. While we appreciate your offer, we're unable to accept it at this price point. We'd be happy to consider a revised offer that's closer to our asking price."
Evaluate the Complete Package
Price isn't the only factor to consider when evaluating an offer. Look at the complete terms, including:
- Closing timeline: Can they close quickly if needed?
- Financing: Are they pre-approved for a mortgage or paying cash?
- Contingencies: How many conditions are attached to the offer?
- Repair requests: What credits or repairs are they demanding?
- Earnest money: How much are they putting down to show good faith?
Sometimes a lower offer with favorable terms can be more attractive than a higher offer with numerous complications.
Counter Strategically
If you decide the buyer might be worth negotiating with, consider making a strategic counteroffer. Rather than splitting the difference, counter at a price that still gives you room to negotiate while moving closer to an acceptable range.
You might also counter by adjusting other terms instead of price, such as asking the buyer to cover closing costs or waive certain contingencies.
When to Walk Away
Not every lowball offer deserves a response. Consider rejecting offers outright when:
- The buyer appears unqualified or unserious
- The offer is so low it's clearly not made in good faith
- You have other, more competitive offers to consider
- The buyer's terms are unreasonable beyond just the price
Preventing Lowball Offers
While you can't eliminate lowball offers entirely, proper pricing and presentation can reduce them significantly. Work with your real estate agent to ensure your home is competitively priced based on recent comparable sales in your area.
Additionally, high-quality photos, detailed descriptions, and proper staging can help buyers understand your home's true value before they submit an offer.
The Bottom Line
Handling lowball offers is an inevitable part of the home selling process for most sellers. The key is maintaining perspective, staying professional, and remembering that your ultimate goal is to sell your home for the best possible price and terms.
Work closely with your real estate agent to develop a strategy for handling offers, and don't be afraid to negotiate when it makes sense. With patience and the right approach, even disappointing initial offers can sometimes lead to successful sales.
